INTERNATIONAL BUSINESS; Former Chief of Aer Lingus To Get British Air's Top Post

By BRIAN LAVERY

Published: March 9, 2005

Willie Walsh, former chief excecutive of Aer Lingus, will become chief executive-designate of British Airways in early May and take over when Roderick I. Eddington, the current chief executive, steps down in September, British Airways said Tuesday.

The airline hopes that the appointment will continue its turnaround. The process was begun by Mr. Eddington, 55, who is credited with reviving British Airways after the slump that began in 2001 by eliminating around 14,000 jobs in the last three years. In a statement, the chairman of British Airways, Martin F. Broughton, said Mr. Eddington had ''performed miracles.''

Shares in British Airways rose 4.5 pence, to 281 pence, in London.

Mr. Walsh, 43, joined Aer Lingus as a trainee pilot when he was 17, and is similarly regarded as a business hero in Ireland for saving Aer Lingus, once the pride of the government's stable of transportation companies, from near-certain bankruptcy.

He took the helm at Aer Lingus just weeks after the Sept. 11 terrorist attacks, and made decisions that if fully carried out by his unnamed successor, will halve the airline's work force by 2007. He turned the 52 million euro operating loss of 2001 into a 100 million euro operating profit last year.

''Willie has an outstanding reputation in the airline industry around the world for the way in which he transformed the fortunes of Aer Lingus from a high-cost underperforming carrier into a successful and profitable entity,'' Mr. Broughton said.

Both executives have taken measures that at times have mirrored those of Ryanair, the highly profitable Irish airline that usually sets the industry standard for low-budget operations.

All three companies, to varying degrees, have simplified fare structures, eliminated travel agents and telephone bookings, and strongly encouraged customers to buy tickets on the Internet.

''Willie's whole philosophy is nearly identical to Rod Eddington's,'' said Kevin O'Toole, editor of Airline Business, an industry journal. ''It's about what you have to do to a major carrier to really simplify the business.''

Mr. Walsh has not made any public comment since he resigned from Aer Lingus last November and stepped down in January, along with two other top executives. The three men had asked the Irish government for permission to buy the airline, and were refused. They are thought to have left out of frustration at stalled plans to privatize the company.

That experience may also be relevant to Mr. Walsh's future role heading British Airways. Because the European Union and the United States are looking ahead at renegotiating their open skies agreements, ''the political involvement of Willie Walsh will be significant,'' said Nicholas van den Brul, an analyst at Exane BNP Paribas in London.

But Mr. Walsh's experience running Aer Lingus -- where around 3,000 employees handle 34 planes on four routes to America and a few dozen to Europe, all under United States and European Union rules -- is quite basic compared with the complexity of the intercontinental operations of British Airways. Its 50,000 employees manage a fleet of 312 planes flying to 100 countries, with many areas governed by different aviation treaties.

Thanks to Mr. Eddington, the top-level management of British Airways is accustomed to fresh thinking from an outsider's point of view, and there is unlikely to be a culture clash between Mr. Walsh, a straight-talking former pilot, and the airline's board. Executives in the One World Alliance, which includes British Airways, Cathay Pacific, American Airlines and others, were known to joke about letting Aer Lingus stay in the group just to keep Mr. Walsh around. (As part of his efforts to simplify its business commitments last year, Mr. Walsh had suggested Aer Lingus pull out of the alliance.)

In addition to making short-haul operations profitable, the short-term plans of British Airways are focused on preparing for the new terminal expected to open at Heathrow Airport in London in 2008. All of the airline's operations are moving to the terminal, often called T5, and much of the company's development potential is constrained until then, Mr. van den Brul said.

The company's readiness will be a major topic at a meeting Thursday for investors and financial analysts. Mr. Walsh will not attend, a spokeswoman in London said.

Photo: Willie Walsh will become chief of British Airways in September. (Photo by John Cogill/Bloomberg News)